Bankruptcy and bank statements

Bankruptcy and bank statements

Planning to file bankruptcy? You will need to round up bank statements. You’ll need them at the beginning of the bankruptcy process; and you’ll need them again for your bankruptcy hearing.

(Here are specific instructions on what bank statements you need for your bankruptcy hearing in Alexandria, Virginia.)

Since you need to tell the bankruptcy court about all your accounts when you file your bankruptcy papers, you want to talk them over with your lawyer early–in time to identify and fix any problems.

Bring bank statements on every account in your name, when you first meet with your bankruptcy lawyer.You will need to tell the court about every account your name is on. So you and your lawyer needs to know what those accounts are.

Does that include the account with only five dollars that you never use any more? Yes.

Does that include your mother’s account that she “just put your name on in case of emergency”? Yes.

Does that include the account where only your wife’s paycheck goes, but is in both names? Yes.

Does this includes credit unions, too? Yes.

Does it includes accounts you have with your minor children? Yes. And also college savings plans you have for them.

Does it includes money markets? And investment, brokerage accounts? Yes and yes.

More than just banks, it includes every place you have money.

When you first talk to your lawyer, you need to talk about all those accounts. So bring bank statements–and other accounts–with you.

Is your mother’s $200,000 life savings–in the account you are on “for emergencies”–going to be a problem? You want to talk that over when you first meet with your lawyer. Do not wait and bring it up when you are signing the final draft of your bankruptcy papers.

The same thing with your wife’s account that’s “in both names.”

When you bring in the bank statements, then you are not guessing. You and your lawyer can see whether, and how, your name is listed on each account. And how much money goes through it every month.

Both of those can be important to getting your bankruptcy approved–without having the bankruptcy trustee take some of your money. (Or worse, take some money that’s not yours–that belongs to someone else in the family.)

Getting through bankruptcy, without losing any money, may take some planning. Your lawyer may have your wife change her direct deposit to a different account–one only in her name. Your lawyer may want mom to take all the money out and put it in a different account. Maybe the lawyer will just want proof of where mom got all that money.

Besides the bankruptcy trustee maybe grabbing those accounts, some of your creditors might try to get to them. Your lawyer will want to compare your accounts with your creditors–and may suggest you change banks for that reason.

All that takes time and planning–so make sure you bring in all those bank and other account statements at the beginning.

Toward the end of the bankruptcy process, you are required to show those statements to your bankruptcy trustee. What statements? Every one that your name is on.

You need to give your bankruptcy trustee copies of your bank statements. That can be a big headache.

Those will mostly be the same accounts that you went over with your lawyer at the beginning, but maybe with some changes. If you have accounts that you don’t use, your lawyer may have told you to close them. If your accounts were in a bank where they weren’t safe, you may have new accounts now.

The bankruptcy trustee is looking at your account statements for two reasons. First, because the law (Bankruptcy Rule 4002) requires it. Second, to see if you had too much money on the day you filed your bankruptcy case. (“Too much money” meaning enough that the bankruptcy trustee can grab some of it.)

Sometimes getting those bank statements is a problem, if you wait until after your case is filed. Some banks, and especially some credit unions, stop sending statements when they get notice of the bankruptcy. And they may cut off your internet access, too.

(Stopping the statements and cutting off internet access is most likely a problem if you owe money to that bank. They don’t want to be violating the bankruptcy law by trying to collect your old debts, so they just stop sending you ANYTHING.)

I recommend a two step process. First, when you come in for your court preparation appointment, bring your most recent bank statements. Those may be a few days, or even a few weeks old.

Then, the day after your bankruptcy case is filed and your papers go down to the court, get an internet print out from the end date of the last statement on through to the day after your bankruptcy is filed. Take care of that right away–in case the banks and credit unions cut off your internet access when they get notice of the bankruptcy.

Taking care of bank statements–and all account statements–both early and late in the bankruptcy process, is a key to have your bankruptcy case go smoothly.

Bankruptcy and bank statements: Update–there’s now a charge

Filed a bankruptcy case for some folks last week who had SIXTEEN bank accounts. Half of them they hadn’t used in years, but kept open because it was too much trouble to close them. Now they are trying to get account statements showing the date the bankruptcy was filed, and the bank is not cooperating.

Duh–if you’ve left a three dollar balance on a bank account for four years, the bank is NOT going to consider you a good customer. And if you thought it was too much trouble to close those accounts before you file bankruptcy, see how much trouble it is to get that bank statement balance now that you have filed bankruptcy.

You need to do yourself–and the bank–and the bankruptcy court a favor and close accounts you are not actively using.

So, I’m starting to charge. I’mn charging for the extra paperwork we have when people have multiple, unnecessary bank accounts.

For a single person, your first FIVE bank accounts are free. If you have more than FIVE! accounts on the day you file bankruptcy, there’s a $50.00 charge.

For a married couple the first eight are FREE. After eight, there’s a fifty dollar charge.

(You also get one more for free for each child you have.)

Each bank account you have means a lot of work–for you, for me, for the bankruptcy trustee. And the more you have, the harder it is–for you, me. and the bankruptcy trustee–to make sure they are all covered. So, close ’em.

If it’s too much trouble to close them, I’m charging for the extra paperwork on my end. You will still have to do extra work to get each statement balance. And if you get sent home from your hearing because the trustee thinks you missed one statement, you were warned.

We like you too :)

Robert Weed has helped twelve thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

Robert Weed

CB

May 16, 2013, pm31 5:40 PM

03

The trustee is making issue with my mothers account that she has me in as joint/secondary – she is 79, and it is a combined savings/checking. I have never touched that account for anything personal, nor have I ever put anything into either the checking or savings. I have statements going back almost seven years. She has over 13,000 in her savings, and 3500 in checking. I am estranged from my mother now, but I am very concerned they will take her money, which is her life savings and social security. What can happen in this situation?

Robert Weed

May 16, 2013, pm31 6:03 PM

04

CB:

There’s a law in Virginia that says the money in the bank belongs to whoever put it there. Code of Virginia 6.2-606. (Unless it’s husband and wife; then it’s 50-50.) I hope there’s a law in your state that says about the same thing.

CB

May 29, 2013, pm31 7:13 PM

06

341 came and went. The trustee questioned my mothers account and my atty stated he will get documentation showing that I have not contributed or removed money from that account. Today I received a letter from the trustee that he is retaining counsel for a possible rule 2004 examination – I am waiting for my atty to respond to me so at this time I am terrified. I gave my lawyer over 6 years of statements from her account today.

Cb

May 29, 2013, pm31 9:05 PM

08

Again, thank you – it was brought to my attention that this may be because I am a 9/11 victim and I am listed on that lawsuit that I added to my schedule (which will be practically nothing, and not for many years). My atty feels thats what they are digging for.

nancy

April 23, 2015, am30 1:38 AM

09

I have joint account with my boyfriend and I filed bankruptcy on 4/13/15 that same day my boyfriend deposited a check for a loan he took out. What do I need to do in regards to this to prove it’s not mine?

Margaret

August 14, 2015, am31 8:01 AM

13

My stepmom ansorbed some of my debt about 4 years ago on a 0% apr card that I now pay monthly through auto pay. My name is not on the card, but the money does come automatically out of my checking towards her credit card in her name. Would this be something that will be red flagged or looked as my debt? And if so how would that affect her?

Robert Weed

August 14, 2015, pm31 2:04 PM

14

Margaret:

You filing bankruptcy won’t touch that debt on the card at all. If you don’t keep paying, your mom will have to. But you can keep paying if you want. (It’s a good thing you are paying the card and not mom. Paying mom could be a problem.)

Shewmake

February 3, 2016, pm29 4:12 PM

15

My dad filed bankruptcy almost 1 1/2 years ago and since that time he has not received a bank statement from his credit union. They keep saying that he should be getting one and will charge him $2.00 to print him one out. Just recently he called again and they told him that he should be getting one and maybe he needs to check with the post office, even though his address has not changed. It can’t be a coincidence that all of a sudden his bank statement stops the month after he files bankruptcy. Is this legal, can they withhold his bank statement?

Shewmake

Deborah

April 7, 2016, pm30 11:57 PM

18

I filed chapter 7 bankruptcy just found out mom has 74,000.00 in money market acct and without telling me put my name on the account Will they take her money for my bankruptcy? My brother and sister are also on the acct. she did this in case she had to go to a nursing home one day. Now my lawyer is mad and said I lied to her. Please help Wells Fargo froze her account my lawyer said just have her write a letter and explain this is not my money. And not an inheritence. Will this work?

Marie

September 27, 2016, am30 11:51 AM

20

yesterday I spoke to a lawyer about declaring bankruptcy, in Ohio. He suggested chapter 7, because I have sold every asset to pay off my debts. I have 1 bank account, and no other assets, that I know of bc I still owe on my car (12,086.81). I am concerned because last year I claimed under 5,000 in income, hence why I have no assets, I sold my jewerly art ect to supplement and my boyfriend moved in to help. This year my business has tripled in profit but I still am just breaking even, because my expenses has doubled (I’m a hairstylist), and I paid off minor debts I owed (personal loans from family and 1 old credit card. I’m afraid I’ll be denied chapter 7, and that’s what the lawyer recomended we try for. I was wondering if I’d be better off just going for chapter 13, and if I would get in any legal trouble for trying for 7. My bank account today is $441.55 balence, I don’t get a regular pay check bc I get paid per customer. This year I’ve been averaging 900 per week, in earnings if it helps you answer my question. Thanks.

Robert Weed

September 29, 2016, am30 8:13 AM

21

Marie:

My general view is that Chapter 7 is better than Chapter 13 for most people most of the time. You haven’t told me anything that points me in a different direction for you. But I get 37 pages of info on my clients before I make a recommendation, so I can’t make any recommendation for you.

Frances

March 28, 2017, pm31 2:41 PM

22

My bank statement shows I withdrew money from the casino. What will my bankruptcy lawyer say? Will he cancel the bankruptcy proceedings? Or, will it go badly for me as far as proceeding with my bankruptcy?

Robert Weed

April 1, 2017, am30 11:25 AM

23

Frances:

The papers you file with the bankruptcy court ask you if you had gambling losses. Hope you told the truth there. Some judges are very harsh about gambling debts. They think that taking money to gamble is somehow dishonest. Other judges say it’s just another debt. Those judges say that if the credit card companies didn’t want you gambling with their money, they shouldn’t have ATM terminals in the casinos. I don’t know your judge.

Robert Weed

Juliet

June 27, 2017, am30 12:48 AM

26

I am in great big trouble with Casinos and the law owe alot of money to loans alot of them due to gambling, I am in treatment for gambling but have made some mistakes and have withdrawn money from some Casinos from time to time out of financial desperation, will that hurt my ability to file chapter 7 also I want to take money out of my pension and 401K to pay the IRS and file bankruptcy can that affect my bankruptcy as well?